Thursday June 26, 12:56 PM
Milan shares lower mid-session on inflation worries, led by Luxottica
MILAN (Thomson Financial) - Share prices were lower at mid-session on inflation worries after the United States Federal Open Market Committee (FOMC) kept U.S. interest rates unchanged as expected, and led by Luxottica (Milan: LUX.MI - news) on profit-taking after a sharp rise on Wednesday.
At 1.30 p.m., the Mibtel index was down 1.12 percent to 22,922 points and the S&P/Mib fell 1.36 percent to 29,602.
Brokers said there are continued worries on the inflation outlook, with one broker saying that he sees U.S. rates higher by the end of the year, with the first hike likely in three months time.
'It was no real surprise the FOMC decision. It is not yet the time to raise rates. Credibility wise, they will leave it for a bit,' he said, noting recent rate cuts by the FOMC.
In addition, investors are cautious ahead of first-half results, due to start in Italy in the second and third week of July, brokers said.
Fiat (Milan: F.MI - news) , likely to be one of the first to report, was down 4.21 percent to 10.68 euros. One broker said he did not expect any change to Fiat full year targets, which are not too ambitious.
Finmeccanica (Milan: FNC.MI - news) fell 1.96 percent to 16.54 ahead of a board meeting today on its capital increase. Brokers see an increase of up to 1.4 billion euros.
In the luxury sector, Luxottica lost 4.96 percent to 15.52 ahead of this evening's investor presentation, though on Wednesday it reiterated its full-year targets, already boosting the share price.
Safilo (Milan: SFL.MI - news) lost 0.70 percent to 1.411. Merrill Lynch (NYSE: MER - news) upped the stock to 'neutral', from 'underperform', on valuation grounds.
In the bank sector, Unicredit (Milan: UCG.MI - news) fell 3.77 percent to 3.9675 after presenting its latest business plan. Brokers said there was disappointment it only reiterated previous earnings targets.
Intesa Sanpaolo (Milan: ISP.MI - news) was down 0.22 percent to 3.69.
Credem (Milan: CE.MI - news) fell 3.66 percent to 5.635. The bank (TBHS - news) 's shareholders approved a capital increase. Brokers have queried why the bank needs the funds.
Among insurers, Generali added 0.28 percent to 24.73.
Atlantia (Milan: ATL.MI - news) lost 3.24 percent to 20.03 on worries major shareholders will start selling after they received direct stakes instead of indirect stakes in a holding company, in which they invested.
One broker said Atlantia's largest shareholder, the Benetton (Milan: BEN.MI - news) family, could buy stakes, adding that an upcoming investor presentation in early July could also boost the stock.
Saipem (Milan: SPM.MI - news) was up 0.35 percent to 28.76. The company announced another order win on Thursday. Eni (Milan: ENI.MI - news) was up 0.17 percent to 23.71.
Tenaris (Milan: TEN.MI - news) rose 3.29 percent to 22.29.
Tiscali (TIS.MDD - news) was up 4.41 percent to 2.1175 after Telecom Italia (Milan: TIT.MI - news) comments on its rival. Telecom Italia fell 1.97 percent to 1.295.
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